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NHS budget squeeze 'to benefit private healthcare'

Published: 28 Nov 2013

Private healthcare companies are expecting to see an upturn in business as the NHS continues to see its budget constrained, according to a new report on the sector.

The annual Healthcare Industry Barometer from HealthInvestor magazine and law firm Nabarro surveyed more than 100 leading figures from the industry, with more than two in three predicting the number of hospitals in financial strife is set to increase.

Furthermore, 90 per cent claimed this trend would bring about greater opportunities for the private sector.

Over half of respondents said they were either 'very' or 'quite' optimistic that the Conservative-led coalition will speed up the expansion of the private sector's role in the NHS.

Researchers also found that around two-thirds of those surveyed believe the value of healthcare companies will return to pre-credit crunch levels from 2015 or later.

HealthInvestor editor Vernon Baxter explained the private sector is striving to "recalibrate" itself in order to continue functioning against a backdrop of continuing austerity. "Sector leaders believe the struggles of the NHS will ultimately result in the greater participation of the private sector," he told the Financial Times.

The study comes just days after a report from healthcare specialist Laing & Buisson revealed income for independent acute medical hospitals and clinics from treating NHS patients rose by 7.5 per cent throughout 2012 to reach £1.2 billion, representing more than a quarter (27.5 per cent) of these hospitals' total earnings of £4.4 billion. This proportion was up from 26 per cent in 2011.

Entitled 'Private Acute Medical Care', the publication went on to predict that income from NHS patients will grow to almost 29 per cent by the end of this year.

Healthcare economist and author Philip Blackburn said mixed provision has become a "common business structure" for many privately owned hospitals.

"More hospitals are looking at fresh NHS business opportunities from clinical commissioning groups (CCGs) under 'any qualified provider' and this upward momentum is likely to continue in the near term as CCGs look to the private sector for innovative delivery and competitive drivers," he added.